California HR Compliance: 10 Areas to Be Aware Of

This post is for companies who have or will have employees working in California.  We try to update it regularly but always double check what’s below (California HR compliance is a moving target and can be tricky).  Remember to read our disclaimer too!

We love companies that operate in California.  It’s sunnier on the West Coast, the weather is nicer, and Californians are some of the friendliest people on earth.

But when it comes to doing business in California the state can be a bit of a “bear.”  The compliance requirements for companies that operate and employ workers in California are numerous and onerous.  And there are potential pitfalls at every point in the employment lifecycle.

As new laws get introduced and then passed, more California companies are becoming subject to the state’s (and local) compliance requirements. It used to be that many of these requirements didn’t kick in until a company hit 50 employees. But that threshold continues to trend lower, sometimes covering companies that have as few as one to five employees.

Here’s what you should be aware of when employing workers in California:

Stick to the Facts

California has strict ‘ban the box’ requirements. This means you’re not allowed to ask about, nor consider, a job applicant’s criminal convictions prior to making them a job offer.  When interviewing any job applicant it’s a good idea to have a written job description detailing the essential functions of the job.  Try to establish a process and standardize the questions you ask to every job applicant.  These questions might include whether they can perform the essential functions of the job and how they would perform the roles and responsibilities associated with the job.  Always make sure that any questions you ask the applicants are directly related to the job itself.

Put it In Writing

Once you’re ready to make an offer you’ll want to avoid including any language in it that restricts an employee from competing with your company. Non-competes are not enforceable in California, so it’s best not to include them in any employment documentation.   Aside from excluding non-compete language, there are many more details that should be put into a written offer.  And if you’re hiring someone that earns a commission or bonus make sure you’re documenting it.

Meet State Requirements

California is a state that requires employers provide their employees with state mandated disability coverage.  This is in addition to required unemployment insurance coverage and workers compensation coverage.  Our post on coordinating parental leave benefits provides more information on how to coordinate state mandated coverage, private insurance coverage, and company benefits/coverage.  By the time you bring your first California employee on board you’ll be good friends with the folks at the CA EDD.

Take Some Time Off 

California was one of the first states to put compliance requirements into place around employee paid time off.  For example, if your employees accrue paid time off, they must be able to roll their accrued balance over from year to year.  Employees must also be paid out any paid time off they have accrued on their date of termination.  Under the CFRA, Employers with 5 or more employees (previously 50 employees) are also required to provide unpaid, protected family leave for up to 12 weeks for employees to care for themselves, a child, parent, grandparent, sibling, spouse, or partner, as specified.

Work, Pay, and Play

California employers need to be aware of Wage and Hour issues when employing workers.  This includes making sure you are adhering to California’s unique overtime laws, minimum wage laws, and final paycheck laws.  Employers who are operating outside of California may not be as familiar with some of these laws, but if you have employees working in California you still may be subject to them.

Harassment Training

If you have at least 5 employees you’re required to provide sexual harassment training. And you can’t just provide any old harassment training.  California has specific requirements regarding what they consider to be “valid” sexual harassment training for employees and supervisors.  This includes how long the training must be, who must take it, when they need to take it by, and how often it must be taken.

Local Ordinances

California has almost 500 cities and towns and close to 60 counties.  Keeping track of every compliance requirement in every one of these localities can be a daunting task.  There are a number of local ordinances throughout California that impose additional requirements on employers.  Some of the most common involve mandated time off, part-time employee scheduling requirements, and enhanced reporting requirements.

Everything Else

It’s impossible to cover every California compliance requirement in a post like this.  In addition to CA requirements, employers also need to be aware of nationwide HR issues that may receive increased scrutiny or have stepped up requirements (and penalties) in California.  This might include misclassifying employees as contractors, not paying interns, or illegally discriminating against an applicant or employee.  Make sure to keep your eyes and ears open, and reach out to a qualified professional if you have questions around HR compliance.

If you have questions about some of the unique elements of California HR Compliance you should reach out to Suitless via email or our contact page.  Our Core HR service provides companies guidance and support related to these requirements, so that business leaders can focus on the bigger picture.

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